On the Brink

Inside the Race to Stop the Collapse of the Global Financial System

From the Foreword, by Rep. Barney Frank, especially written for the trade paper edition:

"For many people, what will be most striking about this foreword is the fact that I wrote it. It's not every day a partisan, liberal Democrat gets a call from a conservative, high-ranking member of the George W. Bush administration asking for a favorable introduction to anything. But when former secretary of the Treasury Henry M. Paulson, Jr., called, I was quick to agree to express in print my enthusiasm for his excellent recounting of some of the most important and controversial events in our recent national history."

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ON THE BRINK is Hank Paulson's first-person account of the catastrophic economic events of 2008. From the man who was in the very middle of this perfect economic storm, Paulson puts the reader in the room for all the intense moments as he addressed urgent market conditions, weighed critical decisions, and debated policy and economic considerations with of all the notable players-including the CEOs of top Wall Street firms as well as Ben Bernanke, Timothy Geithner, Sheila Bair, Nancy Pelosi, Barney Frank, presidential candidates Barack Obama and John McCain, and then-President George W. Bush.

More than an account about numbers and credit risks gone bad, ON THE BRINK is an extraordinary story about people and politics-all brought together during the world's impending financial Armageddon.

If the smartest men and women and the world screwed up in allowing the meltdown of 2008, God help us when the next nightmare strikes. Still, this is a good insider's view of how things could have gotten even worse.

ilokcin
Jan 15, 2015

Clearly shows how America's "finest minds" have so destroyed their own economy that it constantly hinges on the verge of collapse.

It's necessary, first off, to caveat my rating (3.5 stars) by explaining that I gave it this rating not because it is a well written or compelling book (it's neither), but because I believe that it is an important book for anyone who wants to understand how we got to the 2008 financial crisis that destroyed so much of America's wealth and the stability of its middle class. That said, Paulsen not only doesn't provide any information regarding how we got to that point, he in fact delivers a fairy tale about how we got there that exonerates by omission the politicians and financiers that openly colluded in the 80s, 90s, and 00s to bring about the conditions that caused the crisis. Why this book is important is because it gives the reader direct insight into the worldview of one of the major players in this group, and helps to explain (although unintentionally) why he, Geithner, Greenspan, and so many other free-market "proponents" can never be trusted with a capitalist economy. On the Brink is, without question, one of the most self-serving books you will ever read. What may be most disturbing about this book is that it's easy to believe that Paulsen believes his version of the story, despite a mountain of evidence proving why it's not true (read The Great American Stickup and Bailout Nation for just two examples of books that provide this evidence in a clear and concise fashion). And in light of the fact that, even without an understanding of finance, the stock market, and the regulatory responsibilities of government, it's easy to just identify where Paulsen contradicts himself over and over again. I have, in fact, copious notes where I documented such instances, and subsequent reading has provided specific examples of where I was right in my analysis, and the data that shows why. Unfortunately, as important as I do believe this book is, it is, as I noted, poorly written, inaccurate, and profoundly self-serving. In addition, it's ponderous, and while both The Great American Stickup and Bailout Nation (both of which contain a great deal of information, so it's not for lack of content) took me just a couple of days to finish, On the Brink took me almost a week and a half to slog through. I had to actually push myself through the last third because I wanted to be sure that I didn't miss the possibility that at some point in the book Paulsen didn't finally come clean. That didn't happen, although the Afterword is an integral part of the book in that Paulsen uses it to talk about what he thinks is needed to ensure that we never encounter another such crisis again - measures, for the most part, that he actively opposed as the CEO of Goldman Sachs and the Secretary of the Treasury under Bush, and for which he has still not actively worked to see enacted today. Without question, a portrait of how greed masked as capitalism can destroy an economy, and for that reason alone, a necessary, although not enjoyable, read.

This pile of drivel is unworthy of comment but to clarify all of Paulson's misrepresentations, obfuscations, and outright lies: John Paulson (vaunted hedge fund manager) got together with Paulson's Goldman Sachs (and yes, Paulson was most certainly there when this took place) and they designed CDOs (Abacus CDO was one of the major ones) with trashy mortgage loans which were sure to fail. Next they purchased credit default swaps (unregulated insurance credit derivatives designed by JPMorgan Chase's Blyth Masters) averaging a purchase price per CDS of $1.4 million - - - with a payout per CDS when failure (a credit event) took place, of $100 million. Quite a profitable markup on financial fraud, and thusly did Hank Paulson (supposed to be no relation to John Paulson???) bail out AIG (who sold all those credit default swaps to John Paulson, Goldman Sachs, JPMorgan Chase, Morgan Stanley and others) who never had the capital on hand to cover all the insurance they sold (E.g., AIG sold $460 billion of CDSes, or unregulated insurance, with a potential payout of from $20 trillion to over $40 trillion, and they didn't even have $200 billion on hand!!!). [A followup point: Malcom Gladwell was spewing forth his usual disinformation (as does David Brooks, Thomas Friedman, David Ignatius, et al.) claiming in an interview that "Enron hadn't broken any laws.." ???????!?!?! Clearly, none of these faux newsies know anything of the law, nor history, nor journalism, nor finance or economics, etc., ad infinitum. All one need do is to Google the following (and do put it within doublequotes, regardless of what the Google docs say): "www.sec.gov/litigation/litreleases" "Enron" (or if interested, insert one of the other banksters for Enron, such as "J.P. Morgan" "Morgan Stanley" "Goldman Sachs")]